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òrEECH ¿Ei*uiiE UT^H òTaTE díuvaEíió j-iòòuu
òhLT J /KE CITI, UTjv
j ì
-H.
June ¿ 9 , 194 8.

À'MuiM
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Ä a L‘ î- I

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1

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C

MbW&ii^Òiì, íh C«

My ír ím á Cfc&rley, ^rm ïém t &yrmg$

Jfalle* ¡tante*?*, $m tev# &eea

.gooa ©aou^i to ia v lt* m» to at Lead ih* OtAte State

a eotiag *& & ©pe&cer

I think every year over the p u t 14 s*ùtb m il# I h*ve èeea « * y fro® h*re, «ad
w¿

I hi»*® f e lt that it was iaspos&ifede fa r as» t a be jreeent a a t il th is p a rticu la r
tim®,

Coafree* »an

i s »eeeioit, ü i

l ^ | ** 1 »&» the

the federal fteserv# Borrii î tmmA i t d i f f i c u l t to get &my*

of

fh ia y«&r with

Congr*»* out o f m m i-m md «ith & ch&stg#d etafcua Ï fouad i t eaeler to accept
yoar ia v it& tlo a , ¿tad 1 e&a *&s«re you that 1 do aoi .-m
o* of ¿ a l a v i t i loa ih&t
y
I ïfould prefer lueaepttag to the tro rlta tl-m o f t a is ássoel&tioa, b oia g , a*

Charley a&s » a lé 4 jBxwtoet o f tftife-, &ad having
t h is á e e o c ia t i.a , I tälafc i t ms la 1924,

0t

on« tim# bmn Freeideat o f

For you Mia do aot reateber th e t

loag MO I « i l l remind you th&t I h&d th e d ie t i a c i heaor t o be F reeideot o f the
Qbefe

ta a k w » AjMioeiatiott» *o &jft«r a p eriod o f ¿4 ye,-re i t g ite # $*
Ì
pleas*»*« t o «idre»® y o « tod&y*
I
\
Áe yoa U.X kaow, I sa* oat eoaeehet (1 have r e la te d t h is b e fo re ) la the
p o s it i a th at Lord £ey»e® *t<s¿ted o f Lord C atto, the Governor o f the Beale of

$agife*k<u

Miea the L&bor Party «e a t ia t o poser ia Sagl&ad, tord C«*tto *a id t o

Lord Keynes, *8ow that Labor Hm mm® ia t o .poner I mppom they w i l l chop ay
bead off#*
Lord Xeyaee suia to h i » , *Tee, th ey « dll chop y oar he&d o ff, but they
w ill i-at it ba«K oh with & t i l t to ih# left*® (Laudai^r)

I 4ä so t sur« ehother I ¡m ia a nor© o r » le e # forta& ste p o a itio a tfeatt
Lord Catto,
the l e f t .



ïh o ÿ ¿ t é cut h ie head o f f , sad X suppose

i t oa »1th a t i l t to

Uta# *a» aot e n t ir e ly severed* Ju&fc, I suppose, l e f t «tea# H a g , m4

as to th# t i l l , 1 fe e l uretty sure that neither th is nor any other a d aittistrstloa
»©«Id h«.ve very m e b influenc© in changing the t i l t .

Over & long period of

years I have at least feit that I kae* the till that it should bear*

There ura

tim es, I think, ©hca oar eeocmaic and social trends sight v«er too far to the

loft and need to be brought bacx, and times v&ea they veer too f&r to the right
and need to be brought back*

I try to #tsy on that ©ran sours a so thest I tin

not have to ba t i l t ad one *&y or the other*

I f w could «eep tha ecoaoay on
e

such & course, if »a could avoid team and depression** *a would ba batter o ff.
I have related another Incident -vuit© ■ mmhmr of tiaes that X think ia
&
a pretty food «tor? on as*

My associate and assistant, Mr* ^lliott Thurston,

who la a vary sharping parson and has a a&rvelous sense of burner, and I »are
together one evening and I h i speaking off the record to tna editors of the
McGraw a ill Publishing Co* organisation*

they had &bout 50 or &0 edit ora and

X knee a lot of those fell©»#, and «ill# ae ware eating (before I had aad* my
speech) I leaned over to Mr, Thurston «ad aaid^Xlliott, have X ever spoken to
ibis group before/

i seen to kaoa .jnite a nuaber o f them**

in-st he said, *Mr* Ch&iratan, X em u ite sure yau haven't, because i f you
bad I don't thin* you would ba her© tonight** (Laughter)
So snybe i f 1 had spalten to th is group e lth in recent year# they aould not
nave been, ao good as to continue to in v ite m every year*

Bat be that as i t nay,

I am glad to be hero*
la re fle c tin g upon the past, «• should learn to p ro fit fro» our past
aiataicea.

I aust say that th is generation, or at least X aould soy ay vintage,

has not a very food record o f past performance*

It is pretty d if f ic u lt fo r us

to say to the ¿resent younger generation «ho *e saaetiaaa think, are beeoe j&g
too ra d ic a l, that they should follow us*




Our record ia a record of taa ears—

m & m s not enough

m ô a record of two very serious depress! .-ns, *«4 the

way we sees to be hsaded st the präsent tiise *ould indicie thst m have
learned absolutely nothing from the past eatperisnce.

One war, which at the

tifi« s e a m d to be & pretty it r io g i one, and w spoke of i t as a iorld i&r,
«
by eeaparisott lililí til® aecond m r , tiiai m have noi started to recavar f r m ,
&mm pretty insignificant*
the first depressiv» brought th e m à of a good m a y banks In Üt&h and
Idaho, as i recoil* „I was at that time (in 1920) i £ e President of the
's
First latían*! ¿yak of tîgdea, &ad X «©11 reaMwabsr the deflationary pressuras*
Hotéwr, that depressloa by coapwrieon mi&h the depressiv fiñe« i$¿f up «usiti
X9á0 , m e a it seeded to take & a tlit try program of huge gov^rnssat*! e*pendlc
tures to ea&ble ms to utilise our idle man power -mû mat idi® facilities, wm
ém
the depression of the first Äorld Âar seeæ very insignificant*

X 4a wondering

if ss tim# go*-s oa, that, baned upon the past, we are to feavw bigger sad batter
depressions in the future sud biffer mú better s&rs?

It certainly seoss to be

the tread that we are following, but I m. not going to undertake to give á U
the answer to the ways Mid m m » o f preventing wars sad depreseisas*
The problems I sa goiug to discuss are sxtreiaely difficult sad «xireaely
complex*

their solution nast be based u
p-.>s & grm tar degree of enlightened self-

interest than we have evor manifested«

the solution Is not going to be brought

about by «*hat we consider lee» governmwnt sad seore free enterprise, by lest
planning and Kaore of laissez faire*

I a . sure tuai tn«t is not the direction
®

in which we are going, that no political change is goii^g to engage tue a&slc
economic and social direction this country is taking*

Certainly s further

inflationary dev*lopat«nt, a development that is p«m i t ted to run its course,
and the© a liquidation that »ill develop as a result, is not goiag to aa&n
less government, Irrespective of the political philosophy of usy party«




The jgrfe&t ùm%m? iaberent ir* 4 further iafl& tÌ8n*ry develop»#&t or further
»spanalo» of c re d it, fàsì&mr crm%im o f »osey* 1« ih# dtgre« to «fcteb ih#
OormuMiOt w ill tore to la te rv ta e, s.a4 tfeey « ili iaierven© « tbe re . uest
&
tìie v«ry |ieople « o todey «uni ine (ioveiaaaioi to sMdOtit®.
rn

fh t* « ili h&ppm

m m tH® paro**** o f cre d it defistloj*, mloh 1s c y c lie ii, gatss « d< r «ny, «hea
a &
begiae to ifoisai, prie«* begia ti» eoli«?*»«, ¿ -1 fo^Jtrup&c* © © e#
.n
e« »
widespm.d*

ih «a those co a d ltì ne develop ibey «re aot self-eorreetìEtg*

s&w frea* 19*'$ to 1933» *t thè tifi» of tbo t o k holldey, tb&t thè further
d e filiio n *#
$& thè lesa solveat tn© eatire coviatry bec^ «
» *,

I do noi beliisvfe-

th&t ¿il# ibvtnHM fiI « ili p ern ii fcae d e fililo a & ry prece** io m
to tae «stoni ib t tìie <$fl&t ioa «
r*Bt * ft* r 192f*

it& eo«re*

1 do aot thiak that 1
®

poosible infoia — 1 ho|*e i t ia a # — *ad i& arder io ¿reveat tt ttis §overa~
t
i m i «111 intervia# $ooaer

t&ey n i l l iaterveae < & wt$mdi&g *e*l«j
m &

th« rtf3rt| fe r tnos;* o£ a® «no lUt* to preservi* ¿ « ssuch of ih® free eaierprlan
4
*y*te* «* p©**itol«, i t behooves m te orevsat, lasai*? «e «e cì;& & fo ri& er
.
ia fi& iim & ry develop&ieai, fcte&a** 1 4« sur* ta«t *e «osici Ilice io •
-void
in*of&r & poatfibie «nctoaftlve £ov#M*a?mt&I interventi©» braught ¿b -ut by
£

deprtm lon ,

8pmk&a$ of i&*t &** bromgat uà to our prestai inps***, £r.iic*rti,y i t
wa* thè war*

•* eoalci »et over a period o f J years, *Ko«ad over 400 M ilt o n
>

doUfer® and aaly pay fo r aboat 40 per *«f*t o f tri&t eK^«wlit«re mà borro«
thè re si o f l i

«ìtUout erofetiiif a ver? eobst^sti*! beeie of iafitìtio« *

tm m-; * 0 tlie
tia w tio a , &:ìó l i

at |»lo fo r «
-fooui 40 per ce *t o f thè «^r
p&id fo r thè oiàer 60 per o«ftt, & very sm bstuitìài vt,rt

of i t , by borro«fta|r fross i»ie
d iv i àoal a m é corporatioes«
or * m wì& Use m ppif o f »saey*
$

»yetem*

Ih a i #&s borroved fro» in ­

aot in filitie o a ry beosuse tb«it dio nat Increate
T > mtpply o f aoney *«i os.pe»d.ed ooly to- thè
Se

exte&t ih&t tfìe Govonnaont *& m r d e fic it




Àe

fiofcoced >ot c f beale cre d it.

X am gar© «e, 4s baakere» jaaet amo« th&t b«s&k credit is the figure© of our
man#y &u£¡>ly9 that afcm&ver a lom Is* &ade &m ua-aey caaes luto existíate, aad

& & result * f tho ex^kösioa of credit to ta© Ooverameat during tr.s *wr the
5
>
deposits of the banking syst«a «ad currency ia circulation iacreafaed «.bout

500 :>©r cent*

The offset to that great deposit growth in th© b&nKing eyetei»

W6S ftavcrnseat bond* held f y the b«aiuu
e

tu© b .ad portfolio : f th© bm'sing
*

sy& tm t t oa» t ìjm exceeded 60 per cent of tneir tottl deposits, «here&s their
ò
total of other loca* *ad investment* a&s *5 per ceni and les».

¿io* th&t «as

an expaasìoa of tn© .iieaas oí ¿a/a*e»t in ta« hands s f the ou olle that caused
>
ta© supply of foods «tod serrtees av&il&ble for irte public to be ia&d«qu4 e*
That la wiuvt ilUtjLAtioKI 1»*
The r«aôoa you did aot have t v r&Ii infl&tioa durian ta« «¿r «as beccasse
>
of a öaiti«#ä of controls that tr.« Governawmt iapased that m á t it iapossibl#
for t!s© public to s .
. '©ad ta© srasy that they fot a» a result - f th© Qovenusefit1a
>
expenditures ia i>rd#r to o&rry ,> ta© w^r*
&

ta at is on© reason that durian th©

ear period äo ' i u a ot th© suoaey that the public got »©at into Soveruaeat barios.
ijc
They couldn't #?mû it, m â therefore so m c h of it «eat lato büfifcs &aû because
increased devait© of corporvt u^a© and individuals— idi© money, & gr©«t deal
of it.
Wien the aar was* over it seas appartai, or should á a W been apparimi to
everjoae, that th© need of controls ©as macài great *r, if anything, tima during
th© 'war*

H t h th© m.r over, there ©as no real incentive for people to bay

üovem&eat ©©curiti©© or to save aoc&cy»

they© aad beea accumulated daring ta©

period »* the war £ very hu§© b&cklog of demand on the part of not oaly
-f
individuals but m th© part of business generally^ «ad ta© great »et backlog of
desalad ©a© for eo-setbing that everybody abated *.11 &t once*

Those ©ho did not

have automobiles nad roaey or they had credit and they waited to get c*rs




-5-

ia e d ta to ly .

|3 # capacity fo r a&kiAi o&r«, o f eoar&*f could not ba expanded
*

quickly «ad i t aould 'm teaisis« to *x:-m4 m automobile iadu&try so tfe^t i t
coaid «apply t m o iliio a cs» a year fo r & coapio of years ¿ad ties* «h*t *ottld
r©
happea to the capacity?
has bmm true ©f boating.

The *.hol* ocaRORy »oald be wreaked*

Th# aaao thing

The CMreraasent did not undorat ¿ad the re a l nature

o f ta t probles; a* & r w u lt the QovontMRt eae.araged an eaey noasing c re d it
«xpanaioR that created mi a ffe ct ire dttswS i« r ia «x»««i o f any poaaibl#
available supply o f feoaaiag*

Our capacity fo r building l»OR*Sa# » a not
«

aubftt£&t ial^ y la«r«aeod ovor «hat i t w a before the ft&r, and It could not
&
b# iaer« 4iid re a d ily , «ad yet tu la b&okiog demand w # ts-sre*
&.

Yet th# Oovum«

s&ent l3flNM&i«t*iy» under t&o »rossur* of the people of the country, took off
all of th# wyrtiE* controls.

They took off the aXJLoftatic*»« tfcat »ere i» «ffect

during t&# w&r on »care« s&atoriaXs*
fm

fhoy took off building v«rr.it s so that

could go out and balld ©early &n$thtng*

they took off « 4$« eontvoX*«

«tops naturally led to taking off" of ratlofldng m d groafcly »evened

The»*

export

licanaingt m that tho people item countries that h*4 accumulated dollars daring
tft* war e m * ia ansi paid all kind* of prices for African foods#
profit# aero made l t tho export basin*#«»
i
fell that was left on m s

¡vric# control,

tthea they finally took off r&ti-asiag,
loll, price control elthout th#

harness of other control# was worthless*
black market#*
«a# r#peal#d.

th#

prim

fabulous

About »11 it did

control Instruaent m

mm

to eacourag*

dead s ix months bef re it

I etf^mgly advoc *t#d repeal of prio# eotrol aft*r other controls

«©re taken off*
An- th er thing that was takca o ff was excess profit® taxes*
#xc©#a p r o fit t& ^ oo daring th* x«r to or#vimt *ar p ro fits ,
a:»
an» th# p ro fits that t o

b*#n a^d# sine# th# war*

they

ot

the m l war p ro fits

th# profit# t& ,t hat« b#«a

»ad# »lao# th* war &ar# beer« f^ t a o tic , a# a a & il km
r^
om i f ^oa are foli.o»iag to#
reports of bueiaoaa p ro fits .




a » tbo## profit# * r# a r##ult
Lw
*

• 0 -*

f tli# oar and they

«r* ju * i & isoeh
«

p ro fits &• i f ih*/ **r* m
&4* during ih® w«r*

Th* f* e i

tn&t ih#/ **r® noi m é» ^ut of orders «*&t cius® d ire ct!/ frota tiia Q&vmmmt
do*« noi Mt¿n ih& i ih*/ *»r* moi Ja*t n* fâucn *ar p ro fit» .

Ta* êor**mi.®»i

&*d**»&riXy ûQprivmî th* inibii* o f tœio^ôii®« o r hou*iag d i à&tisig tho *&r
pori od.

Ai ih# »
fea* tim«, io* Ôov«nuMat «rooi^d ih* pttreh&#lng p««*r fo r

ih* .« bile to &¿y hew ing and ®ntoas>bll»s im «di& ttly nft&r ih* -sor.
^urcfe&*i»£ po**r » s & 4 ir* ct r#auii o f is# w
m

sud c f «&r profits*

That
Moreover,

/oti ctmidnH &*oi4 ih* fir * t a d *»ooöd &od th ird round of * » « withonfe sa
*&*
*xc**e p r o fit» i&& io *ff*oi*
Th* n«t ro s o li o f ih* i2r«»*iyr® r**&*v&i o f *1X th* ««Muti«4 h<&m
*n*
o f control* i® mor* lo f ia t i o» ©ine* 194$ op io d&i«, ih&ß ** imtî fro o l? iO
io ih* «od of th» i*or*

Th* r**X in flu ii',« *4* noi from IflQ io 1945*

Th*

m i in fittila » ho* do®* w iih io th* poni i*o /«or* with ih* taking o ff o f &1I

o f ih* controls j>r«M&or*ly*
Ko» ihi* lari* «ap^Xy o f asm®/ ih&i v&* m u&nd doring ih* « ir mû th*
» » *lih «ttich farth»r h&nfe <sr*dii coutld b provided **r* rery jiot*Ai forth or
& *
®

i&fi&tionnry for«®»*

Th* tankn à&Y® don® ih «ir Ä a r s io h*ip itring tfaait th*

pr**«at ir*fitóti'30#rf 4*v4fipM 6l| ..nd io itiafc *% «nt ih* law of co&ptnsoiioa
&
*1X1 »** io it i&«t ih®/ o*y ih* prie*.

Too *1**/# pay th® prie® no ®ii&®

or oth«r.

£lr*c® thè? m$r ih* &nly lapett*nt &nil*4nfiniico&ry force in&i w® h<vv*
hfcd in ih* ®*o&ä«y

b®«» th® ?#d#r&i buó$«i ¿ ih* òov*tm®»t hs* ©olirei®d

fro® %'m public in %
«tat®», and ihi« ißoiod** social aec rit/ i«*®», 14 billion
3U0 tfiiiioa doljuyro in *xo®»® of ö o w m ® » t »spandtinr®**

&h*r*&», âmring ih*

«or j**rlost th* ö©w«iÄ«»i,i fi**«,! ^oiioy er©&fc«d ih® infini ioniary 'pr*#*nr®#,
i
foiXooing ih* r&r p®ríod ih® tào*«rasant* & fi*e&i policy h** m m ¿»niiinfi*il®0M7 te th® ojtboat oí' or*r 14 billig doll&r».




Bui daring thin

period of

tim

the banking system nullif t e d

mû

co*api£tely offset th© ©fleet

of ta e ¿ati-inilationary a c ti n of the govenuaent1ü f in e d p o licy .

The banking

system expanded baafc cred it and investments, «ihsr then ¿ovejmasnt bonds, by

m amount equal to the debt th® federal ¿ofvenMMttt paid off*

The ban&s, in

other wards, created an eæouat o f *o««y Just about a# fa st as the Federal
Government, through lie f is c a l policy» contracted the money supply.
Bank deposits did not increase, o f course, during ih l* period because as
toe ^overn&ent **& o ff public debt, the baa£s offset th&i operation by a
id
corre*ponding expansion of private debt,

80%, you say, shy didn*t the Federal Ä « * # m do «aœt&inf to stop this
growth of bank credit?

Or, perhaps, you saigät say this bank credit aid not

have ¿jay Inflationary effect because it m e necessary to order to creai«
production*

However« fóm the supply of asoaey la the h&ads of those that
ti

would syend it et the and of the *ar exceeded our capacity to produce good«
*»4 services, adding more jocaey to the already excessive supply could not
produce aore goods*

The teow that *as air&aay i& existence was s u ffic ie n t
ey

to bring about tmm conalder&bl# In fla tio n without creating «ay ««re bank
cre d it &t &
X1*

The to ta l increase in our in d u s tria l production io not ssucfc

taore th*a $0 per eett over pre-war level®.
cent, soxe ¿0 per cent.

Som items ««at up to 100 per

The t o t a l expansion of food is about « tn ird .

expansion o f sojss other items is higher.

The

But on the ever age, with e l l labor

aæploÿed ana us ing a l l our productive f a c ilit ie s , the increase in physical
production is about >0 per cent, A ereas our aoney supply has expanded by
500 per sent*
Se say itist in fla tio n is due to increased wage« and increased prices*
That is only pari o f the equation.

In fla tio n caaes about f ir s t , because the

supply o f -Sioney, already in existence, is in excess o f toe supply of goods.




that sxertg m upward pressure on prices*

Then, increased wa$e© c ® e about

because of m increase 1» iiie coat o f living*
lead to & further increase la prices*
the cost o f liv in g .

The increased ©ages in turn

till* result£ la a further increase in
>

Then in order to sustain the in fla tio n , the bs&k*

credit ©nd thorn profits Hit#»!»® expand*

0
Xpm 4

So, ia looking at the inflationary

cycl# you h&ve t o take Into account not only increased m*$m

Increased

pricesf but also tha increase is the nonay supply tnrou^a in©r©a^©d beak
credit, ©nd likewise increased corpore&e profit».

It 1« ail part of tr3
©

inflatioti&ry picture, &nd there i « n H ©ayone la the grow# that »ante ¿mytalng
do£i® *dth hi© particular segment*
wage frees©» or ©age control©*

Labor objects str«nuousI> to hsvir*g ©ay

Industry generally objects to the excess

p ro fits tax or any curbing o f profit©*

Hi© farwer dm ®n*t want i*ny c e ilin g

on p rices, but he doas «ant & guaranteed flo o r over & long period of tin e .

He wants © parity guarantee, ©nd he has it*

The bmkss ssnt to be left free to

police their own affairs ©ad decide »bather or not tbey ©ill extend credit*
They don't want ¿ny interference or any curbing of further credit extension*
And everybody «©at© tax reduction*

Iverybody got tax reduction*

All of

ths various pressure groups got pretty much nhat they ©anted*
there arc, however, large ©egwents of the population that ftfcvmH kept
up with the inflationary pressure©, «ad ©re worse off than they were before
the war*

that laeans the aid people ©ho are depending upon pensions, depending

up^n ©©Tings| that ise©ns the fixed income groups mho have ao way of inereasiBg
or expand lug their liicoi&e, ©nd that weans a great many of the unorganised
waiters and groups who ha?© been u&ahle to get incfeaasd onsapwsation in
relation to the increased cost of living*




60 you h&ve developing a very great.

dissöullibriu» *Äong the various income group»•
out of the market*

A great assay are being priced

They «rs only staying i a through spending savingss by
r

using Instalment credit, and by using easy mortgags credit.

They are thus

getting 6o%« of the tilin g s Unti they could not otherwise get, not out of their
current iaco&o, but to the extent that mortgage ¿nd créait lastalmant credit
is expanding, &ßd savings are diminishing#

Ävea though b«nk credit a« & «hol»

war* to expand very little a most difficult eitaabUa. is being created for the
fature*

Be¿*r in mind that is ine ¿0*a tbs#» »as no inflation la price« from

19*4. to 19¿9*
osut*

A ctually there was a decre&ae is the cost of living, o f 10 per
,

there was very little growth la teak, credit*

dut there as» a t remand* w
in

growth ia las»« on housi r,g* la instalment credit and ia the stock «arfcnt*
fee people got too sucti of the national income*

Too

They loaned it to otnara and

»hen the day o f rocke«lag cams, we bad the dsprosai .;* of the 30fs*
1

ih&t ia

going to happen m m the mortgage housing «redit ffella o ff fro» around 900

m i n i a n & montb, %feers it a&s ossa running, to perhaps
month?

or 400 millicß a

lbat ia going to happen when instalment credit, which ia running at

300 or 400 million a month! i.e.# fell iciatfa of consumer credit, *th<m that drops
downî
I don't say there shouldn't fe &om Indebtedness, but there all sold not
e
be a substantial growth In debt on balance*

thaaevor debt is growing on balance

fa ste r than the increase ia ©»ployant &aá production, aikkwhea, ft# at present,
we have f u ll employaesit í¿nd productio»f sfe^t happens shea yon Merely i&eraasn
the volume o f c re d it, ©netlier i t

la hank cre d it or not?

The fa ct is that fce

could get & sub stantial in fla tio n without any fu rther growth in bank cred it
merely by an increased v e lo city in the «misting supply o f money,

Baring a

period o f in f lo tio n aoch as w have today, w ought to have a Iwrgs Federal
e
e




-10»

budgetary surplus which is mm gone « n *e ought to have ay farth er growth on
¿d
balance, or very l i t t l e , c e rta in ly , in in&tau&ftnt cre d it Mid la s&rtg&é* «redit
or in any kind o f Ita&x credit*

That doss not ase n that you liq u id a ta what
i*

¿ou bava, but i t m*M& thst the growth or credit extended to one group should
not be greater than the con tr-ctioa ©
¿.4e by another group*
the Fedar&l Raaerve c&a do about tnts*

There is nothing that

the *a*dOB *hy w cannot stop the
e

expansion o f bank er a d it, &nd the reason «by *a cannot put pr«aiurt on 1«
because w c&nnot ûm$ the buaicta^ syst s& acca** to reserves ahich are the banIts
a
fo r cred it expaaalon.

As long aa the amks hold large p o rtfo lio s o f Qovemmeat

©onde, as long as the Feder»! üe*erva stand* reedy & the raaidusJL murk»t ,
&
as the* lauiit do# then con trol has passed fresa ta« centrai bsaak to 14,000 private
baaics»
choose

Iadlvidu& lly the*« tanks can elect to get reserves say time they

to

s e ll th e ir govern»««
ata»

Opon «very dollar*s aorth of ^ovaraaent*

that they ¿¿ell to the Federal Saserva, «hich ia the residual is&rkafc, that
creates a reserve d o lla r fo r the banking system upon ^ ic h the fesnking ayate»
as « ahoi« can expsind 16 worth o f credit or nea money.

So that the ereserei a l

banka, omln$ as they do today about 45 b illio n o f öoverament bond** could s e ll
s ix H l l l ü i fo r example, Mid bave £9 b ililo t l left*

Wpcm fcfeat six

they »eil# 36 b illio n d o lla rs of addition al cred it could be extended.

b illio n

In othsr

nords, in ta la say they could nearly double the present outstanding volume o f
t h e ir lo&as*

That is «hat the esultiate cre d it expansion p o s s ib ility is.

is nothing the Federal Beserve can do atK>ut i t .

There

That is any since 1945 the

Federal Kasarva has been pointing out tfcie dli*s&* to the Congress ia the
Board*a report# fo r 1945» 1946 and 1947-

I »as before the T a ft Confitte© t e ice

la s t f a l l , then before the Banking and Currency Cawsittaa o f the Senate, then
before the Basair^ and Currency Coia itte e of the Ho««»*

in aprii I discussed tn is ahole question,

At that tin e end again

the report that I m ée feafore those

co®»^itteaa at that time was seat out to a l l benks so I don't need to cay too




- li-

auch aere on thafc «ubjeefc.

The faat it thet tr*e Potont 1^1 credit «à ich the

b&t&ing «yete® ea& #*ten4 toá&y is aisaet «itaoui liait*
ä©a if the Federal fteaerva 3/stea. could us« ih© pa*er* that they ha**,
*hich I reXer to a* the tra d itio n a l p3wejr*~~?eos>le «ccuee ss o f eeefdng vâcnrt and

m m paaar mÁ cá a tra lisu t Isa*
tala in g about*

PaapXa « o eay that don't mo* timt they &ra

fh a Feéerâa Ia*er*a S y stm , o f course, has «â*^»i9 po*era

to «top & further tank cre d it in fla tio n rig h t in it s tra ck s, but to do eo *•
vottX4 nave to withdraw from supw rt »f ta« Govemnent «arîcet*

lie would oeaae

to be thè »sldu^l aturitet fo r Government bonde*

Sow th¿Lt is wh«t happened a fte r

the la e t wat in i$2X*

They reload tne discount r&te*

They etappe4 in fla tion *

they denied the b*naa c re d it, and the- booting' system **s unable to expand cre d it
because the source of reserves ob w&ieh cred it aas fe&öed was deeded to thesu
But what happened to the Government boad n&rfcet?

exempt bonds »eat do*n to 83,

4 X/2 per c*nt fu lly ta x

The feasrai Oofvrnrnmsat ^»id 5 per eent for 90-

day paper on & fully tax exempt basis*

Ho« th*t la whet happened.

it f e today with & public debt of 250 bill ion dallar*?
e
cent ef the eatire public ima privete debt combined*

»hat i a u U

Tai» amounts to 60 per
A very large portion of

this huge pabilo deist is held by the Ounkin« ayet e s &nd the insurance coa^paniee
s
and the savings to&nfc* an4 various fidntlary institutions and trust funds*

That

debt an«t be asana^ed, m é eertainiy the long term, tue Z I/i; percent rate, &ust
be protected,

leu ausi ask yourselves ah at would happen to 50 eoa« odd billions

o f I, f and Q bond# held by the savers of this country if the government r^te
aera géraitt«4 to go up to 3, 3 i/2 or 4 per cent with other ro te® in proportion*
.
Certainly the whole taring* debt structure aould likely be c '«verted*

Holders

of the lower rat# outstanding eeaurtii#« - o . mmt to go is end buy the new
- a Id




-12-

hi^her rats ss&rkst ssearitles*

Th& Oovera&e&t «oula b« f&ced *dth ineur-

»ouatabis probimm % ite essm tiiâl refuadiag opérât ion#.
&

la tfce asxt five

ye$rs> a-om 70 b iliio » daXX&rs o f debt f& lls 4tis.

tfe&t de&t be

rsfunded «It'aout feay oert&ia «krkti?

Eow m

Se Juet dga*t b elisvs i t csa*

*âd

«îu\t «oul-d h&ppsa to the b-ânkj if uoveztu&sai bonds fwr# psrsdtted
i à s ir 01« XeveX*, ¿ad th» Xsvel, Xst us s«ty# fco he 5 or 10 point© belov the

preseat Xevel?
Ju Xüôg as the Fédéral &e»erve s&aads ready to support tas Qovernttsnt
s
b ïfid sarket, i t provides aoiaey fo r tri® bà&ks t o lend»
to ra ies th* discount rate is {saaaiogX««*»

fjteder ta««« clrcumst^nce»

So long as the «&«rt-t*m rs ts ou

ôoveraaentsssurities is X 1/8 per cent or ¿aore ao o^oic 1& ¿oiog to us« the
discount f s e llit is s to
s*©«rtties.

r«serves*

îhe>* w ill » ali sh ert-tem Gov«m»«nt

ïa e re fo re , t o re is e the dlsccrnat r«&# i s purely académie,

i#

hâve adwcated thaï the s&ort^tem {¿ovemasai rate «boulil 'm persalite?d to
fla d it» XeveX la reX&tioa to the i^ g -t^ m 2 X/2 p«r ectit
is ao

bat thers

point la le ttin g the short rate ^o u > to the ¿soiat enère the Solder»
|

e iX l st* rt M lx ia g laa^-tern boads & d sejLX th m short*
&

ttis degree to wëtidi

the short rate e&a go up le a very sisalX aisooat* «aybs l/Ô or 1/4 of X per csat,
aad thea the discount rats © go up &i£#itXÿf but th*t w^uld cert^ ialy he «
a»
ainor « oiti-iaf la t 1im^ry ae&surs*

Ée have mgg®%
ted ether o»esure» thet '*re aeceee&ry md deeirable a«
t âubetitute for the % m àltîm &l methsd o f ré».Uia^ tae dl *çom t rete ioid
u
dea^ing tiae fea&k* e aorfcet fo r tà e ir Ê©e«riti*».

Mhet »e ere proposiîjf is a et

aore ^ e r # i t ie ^erely a p a rtie l substitute fo r the power that hsu; beea los%
.
and the po«er tbat i t mm m m t tsa t the sentrel beak shouid hv.ve froa the
tery laceptija of the instituti:m *

Tod&y the Feder<X Asserve System le un^ble

to perfora* the iuacticm fo r salak the System « e «pssted*
&
o f iaflsfeioa to-:i- f*



I t is « i engin »
a

I f the feder&X Be«srvs System did aot e s is t et e ll* i f

it wer# coaplsteiy oat of ti« pletore, yo« aoaid &&ve & saidi lo«« .af u t W r ò r y
situailoa, beea-aae tbe very f&et th«t it éam &xiM $ thè w y

f«cl ihai

it ai ads tnere io aupport thè pubile debt i» thè baaia for mXtl.pl« credit
expaaaiea*

It 1« iiaport&ni that b&aker* shouid recaci** tkia faci, &&d

ividarataad thè proposti & sf thè Bo^rd to de&l eith ihia problea.
h*.ye no a*ea to grbid.

Oar approach 1« ©atirely ofejsctiva.

Si earWialy
a

If oer proposti«

¿*r& noi iha aay to detti eitfa thè probi e& of credit ihea thè Saltar« akoul4
co®« forth ait& «ama klné of & protra* tbai «111 da thè job in «a«« è
volBBtary aysie» of b&nk credit coairol da*« »et aork.

T&a feaeiioa whieh thè

««mirai fcanlt m e creai ed to perfora cert->.ialy e&ouid be re~eat ablid&ed ia ©
eia
forai or znQthnr.

Mo* 1

¿tòt e&ying th a i volunt^ry reatr^lnt ao»*t «ork ^t a ll*

I ifrla k

i t ha« dona e a ® good, but i t la a preti/ d lffie u lt forobla» to gei 14,0-0
o*
competitive ina t liu t i. ¿n$ io «sartia« mmgb re«traiat aac e e if-e o n tre l to
preveai * fu rtn -r ovaraH era-dii easMaaloa«

I t ia a d lffie u lt ih ia g far thè

la d lvid iu tl b&nxer to d«ay ahai « ® io be a p e rfe tti? so*aad and fo o i loaa s&ea
a« «
«e Kaoaa i f he doaaa’ t «ak* It hi« e^apetiior « d ii.

je t ifch>i Iosa «reatas

c re d it, create« saa arney in ex«otly th* « * mmx&r m s* y other kiad o f baak
?* •
a
eredit , «hetòer i t 1« good or bad.

aheri tè a i d oli# r ia enee pai oui io thè

W ro m r> eepeeially i f it 1« a» * a..usa &
*
eid it ia a H tie d to & crop that
ia paid o f f wtiea ihe c£op i« «M&riceied, that desiar ihan beo «e» ¿mrehACÌag
po*er fo r aof«ebody elsa a&d aosebedy elae and aoise&ody elee.
apeading «tre*» «&ea it 1 oaee ereaied.
«

I t 1« ia fche

thè exp&nsi.n of b&nk cred it for

Uouaiaf, tfee espansi^a of baaìc cred it for coasomer cred it doee aot iacre&ao
proéaeiictt*

fc^t i t doas ia to^.latóre*©« or saatala tue deru^nd fo r a x ia tii^

produciioa.

th a i ia #iat hap^aas.




C e ria in iy eoaaisaer cred it doea noi create

-U-

m y more suto&obiles or any m r * housing«

How if y au ere loaning to a f*ra*r

to finish his crop and the dollar tiut you lo&a so®*« k c « to you íéis© the er op
is asriceied, that Is a different tyj-e of credit; or If you &r* lo&ning to &
sugsr t am&my to produce & crop, or to « canning c ^p&ay, or to produo# &
cotton « 0p t m *hm th« erop Is asrksted the loan ia paid, then that kind
of credit is 3«lf-li qrixUtt lag*

Bttt a&st of the credit ahich ih® banks it«

extending todi»y is not of that type*

k'otwitb standing the deflationary procure#

exerted by he&vy äovernacnt ta» collect ions fro®, Juiuàry until E&rch counting
to soaethiag ilk® 7 billion dollars, there was on b&I&nce m m pm & im of credit
on the psrt of the baaicing »y*t<m— äs I recall it «&• something ilk® TOO «illico
doll&rs*

Even though there «ss 4 contraction ia caMserei&l Ioau© there *&a

enough expansion in mortgage credit «ad in consusser credit to m&k» m

overall

axosasiaa of credit during that period*
I fcould my to you bankers tiut individu&lly *ou . » e going to ft&ve to
.r
t&ke re»!»-,fislbiiity for »hat happens ia your b&nfca*

There lsa*t a&ything that

c«ö be done effectively on th# p^rt o f the Federal authorities to stop or to
curb or to curt ¿41 or to iafiasaes y ur credit expansion today,

ïn«re is no

chanca for as effective curb an further bank credit expansion insofar &i the
Federal O^v#roneat is concerned, except paratia*!*«} «o if I *ere a beaker I
would keep *. loans do«® so that they did not exceed, I think, about 30 ; > r
fy
,e
cent of æy deperite*

As for the 8>vem?aei¿t b:>nds th&t you own, that .«oney

has already been created, and spent*

The offset to the deposits that you nave

against gavsnutwait bonds should be held againft the government bonds end you
«should not reduce your holdings of Govarmsent securities for the purpose of
getting ¿ore reserves on snich to sxpand bank credit«
generiti teras*

Certainly in th« consular credit field sad ia the. housing field

I would ba eatressaly restrictive.




Äo» I am spaaki&g in

In the comerció! lending field enere the

-15*

Xo*m « I li feo s# lf-li^ u ld * tia g > ife*re ,ii 1 ti* d to produoiioa, so thoi whoa
«
¡¿rodaci ì->a 1# sole. I t « I li ilqaid& io iiì« lo&a, I *oald extmà t&gt kiad ©f cred it
bec*aso it « Ili feoip io austria producilo«*
Ho* I b*v* t«ikod fror« fo r & loag iè lle «ad I fc^r* ras&blod t roano.
»

às

you kaow, 1 dida*i vro..©r* 4 apaeeh feat I ob golag io s&jr sosaatàiag boro ih& t
1» s irie tla r o ff thè record#

Itoat X hov* *&ld Ss o ff, io o # bai ib is la

j&rtleiiX&r,

look-lag to ih* future, is o ff in« record..
?

fuor* 1« ^

#ì«aieat of yacort&iaty.

it a ^ e rodaeed i&ìto», rnd ih#
f#

budgetary airplite taoi «e ood &o ©a *atl~lafi&tioaarjr f«ctor is goa*.
laporitófii*

*&. «reati? m
«td
fi*

1«

bui or top of ta«t thè ¡goymtm&mt h ts octored a progr«» th&t bit®
&
t«rskin%X p&itfc of eitpoadiug ih# tUiltry eeièbliolii&oai «ad «orld

iahors^s *• tàougftt i&«t jftór thè- budget of 3? bUlica mts protijr hi^i,

fchi» eoal£i£ jffer ta* budget o<4~U for * m
ialiauis. of ££ WLlilrns*

*« t&lfc «b;>u&

eeoaosay la ©o*#rasi®sit, we i&l* «bout cutting .patelle e*p«»ditur«8 &ad «• «r*
eatir^ly w&r*&li*tio <u»out li, tMKtaa«« th* «fóoaft& tiaat c o r«*lly b* cut is
hj
f&atoetic&lly *f
tw*li*

S® long

tao militari expeadltare (solch iàio coai&g

ye&r 1» 14 bll iioa dolilo**) 1« a* l«*rge *s it 1», «ad so loag » s thè foro!**»
¡
«id progriyfe lo ai* feillioa or over, ihor* 1* 20 &iIlioa la tea Itemo, oo k m g
m

tb* isteresi m

ino patelle debt lo «¿«¿»riy 5 X/2 blilioa, m é eert-inly if »e

should do «a«t m o m peopie &«x uà to do, tiì&i io, aoo i»o traditi oaul ^uthority
of Ui» Federai &oo#nr®

«diàdrow fresa iàe 0 o r * i m m i b.,ad cu^ei, lai

iatorooi r*t«o io a# oo tà* «e«as of &topyi,:g or adii «paiiai| ioi tnern |o
oo high ihfei peonie just «oa*t borro«, or iot th«a go oo aigh thot you c«rtuialy »ould stop lafl«itio»— nt»ore *o«ld

c-?ot <> oorr/1
;f

ia« ^abile debi
#
/ XS
f^lli ! t
.

ooai i bo t*Q blllioa doil^r*.




^aythla^ t^ofc you do tosrord» iacroaoi. g ih# cosi

-16-

of enrryiag tne >ub<,ic debt— «*vea 1 per cent on tâ» outstanding

ublic debt

le ¿ 1/k bil l o a a year, m á If you increase the overall cast of currying
the

-ubile debt the budget «onid go up 1 1/2 billion 4 yo.-r# so you see you %ß* t

véry «eli cut the cost of carrying the public debt sa that frost.
Tu* iretoran*1 sdii progrí,©— &sá tuero sees to be no politici*»»« la *ny
p&Mty ito* w < m M 0v m é r m m of not voting for practically every veterans* program
that « M M before hi»— ¿>nd you have a votarono* program, o f over f billion.
Tou have there between 3a and 33 bili ion dollar* in absut £ : u It orna!
::r
i © all «ant public roads, we want ronlft&stiua* and a greet isany people
f
»Mit the f & m aid' progr&£j they wsat to gu&r«nte« parity payasente ta farmers,
««a that costs m oth er substantial amount of miiseyj so tb»t as * ,1 look the
4
tM04
<& over y . u b*¡¿?in to see that to long , s you have &n «xpandi, g áilitary
-»
t
program mû m expanding foreign old progra#, tnere isn*t very m c h hope of
further cutting the budget*

There le an indication ¿¿nd an expectation cer­

tainly on the part of the aiiitary and certainly m the part of the people
who are «¿treme internationalists, that the budget by 1950 will, reach &t least
50 billion dollars.

There is an expect at i n that the milit«ry program Mill

’» expanded within the next t*o year# to *.,0 billion a year*
a

Ito* if *e have

any such expansion of the ni litara or foreign aid ¿rugr*» and «¿¿nag with that
you get eotae further inflation, then of course that “
aoann further appropria­
tions by the Öovernaent to count «r-bslsitce the Inflation#

Congres* has just

passed a bill that »111 cost a food isany hundred million®, to taise care of
Civil Service employees of the Oovern&e^t, to give fell of them eoa» 300 odd
dollar» to help ovoreo*» the increase in the cost of living.

If we are going

to be realistic about the future we h&ve got to find a m y of bringing about
& basis f o r po*e# in the world .,r«tty v-ulck.




-17-

Äe cannot carry -ut «n ccpandlng

ailltary pro grm tfeat

h m no t e m ia a i p o in t, a mrié * id prvirm tfe«& ha*

no tc-rskia&l >oiüt T*lihoy& «reekia#

ur damestle acono&jr a it •,-.-^teiy oa the

rocks of taflatlaa or «ithvut ispo^ia# duriai ¿¿aaeatiSÊ* & a&r»e*e e f aoatrala

tha& woald a&va t a be w i y a m b «a ra •*&*»** lire ta s » uijrtaiag m

evor

-mum

dariog ib# war.
® « tbosa se*» to m t o be ta* feerd alternative* v lth »tileb a© «r#
or
e
a<'-afroiîtod*

li

ia oaiy n a tsro l fo r

-ay bur*&uerèàc.y, fâftü« r i l

U ® Llfc*«rjr
±

:> «mr ofch*fT, or abetber i t 1* & priir*te orgMtl&atioa, a itli ImsMi a&iur* &*
r
i t 1«, to *ast to f®t b iffe r «ad b«tt«r*

The liavy, â iw , «ad M r fore« ««ver

tri* * to fi&d *-*ys «ad a < a o f e s r b lg or ça ttla g c*r red eiag ex#«©ditareü*
i« * e
T b * lr A ttitude trna «dwaya feoen a# o f fi&dlnig *«y& &»d aa&a#
fo r eap&aelotu

mû

It take* e lv lli& a s to curb tftfet fclad of a c tlv lty .

ju e t ific ^ t l «
C*rbalaly

tae forelga Oovm nMats, China «ad ta* reafc o f them ■r m i ¿'olag to f i , 4 way*
t
&ad ta#®& o f redueiag th e ir deseaad* upea oar U..v«rasteai*
8

Thej *,r® golng to

try i o fin d *&y* mû mmm o£ J u s t il/ l ,g âfi4 gettiag &L1 tb&t they e*»
poeslbly £*t*

And so it i# « lia the v#t*r*nt &ad «itb *v*ry®a* al**«

Th^ Idaa

o f & prograa oa tho part o f ta* s llt t a r y tbfet w « 1 & defeaee progr&a, or
¿* 1
a !»r*f»fcr*d»e6s ¡nragr«*» «aea* to m to b* fmuaght a ltb & good de&X o f d & g r*
e
« »®

Il w* &&d & $ragraft of ^rajsared&ea* for offensive ruiner tii** & progroa for
defaaeive purpoaee It »ould b# aaoibor tbiag»
Beeplto b*#a ea^eaditur^* o w

frep&reda^sfc i# a relatlva tii?af*
*

a perled of yeara wa m y flad tH-it m &r« laae

prep»red la rel&tic^i to foanla tb&a «# are tod&y*

Certaialj the Srltieà «ükd

tha fronça -mr* botter procréé to da&l wlt& Hltîar ia *34 &ad ftüLljr adaqa&te
to éa^l *lth bi». ia *3>, but la *39 thojr wer# ua^blo to deal «Ita aia.

tf i a
êo

tha J&p& aeat lato Maaeburlii *âad bro^» the iiaa-^awor pact »a wer* «ell ^r^Miraé
to

erforc© th* ¡Mtaea, but «a*o. tiiaf etruek us &t Faarl ftarbor, altaou^ a*




-ia-

were m ch bitter prep&red whea they struck at Pearl Harbor than m m they
aaat iato M&achnria, relatively &© war* leas prepared,
A praparttfeaaa program for sefaaa*, i f t t aaaas anything,

araaaeat race, «ad «a «xwMMBt raae has always ended la war.
democracies never strike first.

&s
r

la wa-r the

Ia the next war the country that strikes

first will have ui advantage possibly superior t o the- coaatry a t t a c k e d ,
a© aattor shat the preparedness is, w&ea there $ay f w so «««i thing as &
e
preparedness ar a defense against taw atimia bm fyjmd those who strike first
»i^nt j - t «a end to the country they strike, and all yoar eJaart at pra"u
paredeeaa a&y ga to naught.
Se &re ftot living la a *s©rld or dealing with a »©rid of old school
f#
military prep&rwdae&Sf, «her« /oa have plenty ^f tiste, suds &£ *as true in the
past.

iabady doubt a that i f we get into another war, it la going to be an

atomic war*

It will be a m r where the m® tfest strides first will &&ve *

▼wry superior advaafcaga#

It « m u to aa tn&t we are being confronted «1th the

uapXea&ant alternative of & regimentation of the domestic eauavsqF* »hioh la
itself would destroy the aery thing th&t our military preparedness is designed
to s^ve, or an Inflationary devwlapfitmt that would likewise wreck or destroy
our systeau
la a friend of alaa said, It do#sa*t sake m c h difference whether yoa
*re destroyed by y ur eaa&y or destroyed by yourself, the destructi- - »ay be
a
jast

complete either *ay*
fcblle we are vastly oettar prepared or could be within a vwry short

tine, than «¿ay potential eneay, our pas ition, it seess t > &e, shoald be used
ssuch ¡sare aggressively than it is i i the safaraegieat of the pea©«, even thoagb
i
you risk getting ini© sar yoa h&d bet tar nave sa offensive prapsredaasa with
¿a and point in sight that you are prepared to carry out than & drifting



-19-

Progrès

of « daf^ïiaiva
t

prapkradnaaa aitheut a taralïi&l [Mut*

Ian't it batter

to t&fca ttie chance of gattini; thè r«r ah ila you &ra b«tt r ^ra-pt.r*d ,-nd chooslag
your o a tlaa thaa to a&tt md lat tha othar falXoa ehoo&a tha tl&a wniia you
art* $iiarpiy aittiag fey and «ftlting.
It la a^^arast, 1 am m*r©f to ail

ot

u* taet tha tlaiiad fïatio&a h as turaad

ont at ta» jr«aaat ti®e te# ba l&rgaly & aaap box.

It 1« inaff^eiiv?*.

It le

aÿp&ragi to o - that fea&ai& la t&dartaiciag to aabat^fe avary affort wa ara
s
in
«afclr.g/tha waatara danocraciaa
alaaahara in tha aorld &n<3 la jsaJcjjkg
our f^relp ald program, **«4 «ili coatitwa to do so, ©ach laaa affatila# than
lt othar*?taa m g baj that it la golaf to ba bàair pturpoaa to æaka it a«a«®tial
&
for us to continua indaflisitaly, ftltbout a t$rainai point « foralgn ai€ progr&au
If thay c«n* «io by forcing os to araafc our daiaeeratic syata» aither sn tha
rocks of inficiali or ui^ao tha rock» of & totalitaria» ragtæantatioa to >raa«nt
it, that 1» juat aa affaciiva as it aouXd ba any othar xty, &ad «ucfc ch »à per
for &u$&i&.
Saw wa had teatiar ba pratty raaliatic and not ahut our ayae to tnas« unpXaaaant aitateativaa, ««¡4 it asa«** to m that la Just «bout aliai m ara doing.
In gatti&g back no» to ahara I striad, thia ganaration of mia« h&s &ada a

pratty completa ftilara in tha çaat*
apaca of ¿5 yaara.

Aa 1 sayf ae aad ta© aorXd asra «ithin tha

Cas# aas not sncmgh.

And aa âad ta© depressione«

fa# osa of

tha àQfs m i d i m ihoughi «aa orati/ bad, ta&ght ua nothing and »a aad to h«Ta
tha 4ava4featlag osa of tha 30*® and it ssasts ta na that «a &&ra Xaaraed llttXa
or nothlng fros tha paat» Judging frosa tha

program that

io fea diaaufeaad for

tha fntur«.
I hata to and upoa a nota of afe&t sii.^it appaar to ba di»cour, ^aai«Bnt, but car»
t&lnly auiaas aa faca tha raaJLltiaa of lifa, tuilaaa «a ea&^a t« ba foXi^inaa, «a
hara vary XittXa ^»«nea of do U . «way battar in tha f«t«4r* th«n aa htva dona in tha
-g
past *
I th&ttk yon.
(Standlj^ appiüuaa}